Bankruptcy filings down in Connecticut

Published 9:30 pm, Friday, February 5, 2016

WASHINGTON >> The number of bankruptcy filings across the nation has been on a steady decline for the last five years, and the Administrative Office of the U.S. Courts announced Thursday that in 2015, the country saw the lowest number of filings since 2007.

And the state of Connecticut has seen the same trend over the year, showing that businesses and individuals alike are more able to pay the bills in an improving economy.

“It would make sense to me that we would see a decline in bankruptcies,” said Donald Klepper-Smith, chief economist and director of research for DataCore Partners in New Haven. “It makes sense to me when we have a job recovery rate of 89 percent.”

The Administrative Office reported there were 844,400 bankruptcy filings nationwide in 2015, down from 936,725 in 2014 and more than 1.4 million in 2011.

As for the state of Connecticut, there were 6,294 filings — 249 business and 6,045 individual filings in 2015. There was only one filing for Chapter 12 bankruptcy — what the government describes as reserved for “family farmers” or “family fisherman” — and that came from New Haven County.

New Haven County trends match the state and nationwide trends, according to the data.

A decrease in bankruptcy filings definitely shows the economy is moving in the right direction, Klepper-Smith said, and it’s logical that with economic growth, the nation and state would see a decline in bankruptcy filings. But, what will happen when the economy slows down?

“The question is where do we go from here,” Klepper-Smith said.

The state Department of Labor reported last month that the December unemployment rate saw the first increase in unemployment since February 2015, as it rose to 5.2 percent. But the rate is down from 6.3 percent in December 2014. The number of unemployed Connecticut residents by the end of last year was estimated to be 99,049.

Case filing records from district courts in Connecticut reflect that 531 bankruptcy cases have already been filed in 2016 across the state.